Agenda item

(a)       That the school reserves balances as at the 31 March 2019 be noted;

(b)       That the Committee urges the Authority, notwithstanding the Estyn recommendation R4 and recognising that schools are not entitled to set a deficit budget, to continue to support schools in financial difficulty with a view to resolving deficits without detriment to pupils’ learning; and

(c)        That a letter be written, on behalf of the Committee, to the Welsh Government Minister for Education outlining the Committee’s concerns around school balances, which were clearly replicated across Wales, and seeking clarity around funding for the teacher’s pay awards and increasing pension contributions.

The Chief Officer (Education and Youth) introduced a report to provide the Committee with details of the closing balances held by Flintshire schools at the end of the financial year. She referred to the overall level of reserves held by Flintshire schools which had increased compared with the previous year.  The overall secondary schools net deficit had increased by £0.169m (13.1%).  This was offset by a £0.172m (7.2%) increase in primary school reserves and £0.057m increases in specialist school reserves.  The analysis of reserve balances for each school at the end of March 2019 was appended to the report.

The Chief Officer advised that secondary school budgets continued to be under pressure.  At the end of the financial year 7 of Flintshire’s 11 secondary schools had deficits amounting to £1.879m.  The level of reserves held by secondary schools with positive balances was 1% of budget which highlighted concerns about the financial resilience of the secondary school sector in Flintshire.   The Chief Officer explained that ongoing austerity measures and demographic changes were factors which contributed to the financial position and raised the question whether the funding formula provided sufficient resources for smaller secondary schools to operate sustainably.  Pressure on secondary school budgets was replicated across England and Wales.

Commenting on the position of primary schools in Flintshire, the Chief Officer advised that primary balances had held up well despite the ongoing pressure of austerity, however, primary pupil numbers were forecast to reduce and this would create challenges for Primary Headteachers in managing budget in the future.  At the end of the financial year there were 6 primary schools with deficit balances compared with 3 primary schools in the previous year.

The Chief Officer reported on the main considerations around school balances, as detailed in the report.  She said that overall the value of surplus balances in Flintshire schools exceeded that of deficit balances.  She explained that, in practice, surplus balances were already committed by schools to specific projects, or to cover the uncertainty of funding and changes in pupil numbers.  In accordance with the Regulations, the Authority’s Scheme for Financing Schools required schools to submit a spending plan as to the use that the governing body proposed to make of a school balance which exceeded specified limits.

The Chief Officer also reported on deficit balances and advised that as funding levels to schools decreased due to the austerity measures facing local government there was a risk that more schools would move into a deficit position.  She referred to Recommendation 4 in the Estyn Inspection Report following the recent Inspection of the Authority’s Education services and said that the Education and Youth Portfolio Management Team and Schools’ Finance Team had agreed a range of actions which would form part of the Authority’s response to Estyn to address the recommendation to manage the reduction in school budget deficits more effectively.

Councillor Ian Roberts expressed his thanks to the Chief Officer, Schools Finance Manager and her Team, Headteachers, and Governing Bodies, for their hard work and proactive management of school budgets.  He spoke of the pressure of continuing austerity, the uncertainty around funding in the future, and the difficult decisions that were made by Headteachers and Governing Bodies on a regular basis.

In response to the comments and concerns raised by Councillor Dave Mackie around the schools funding formula, the Chief Officer and Schools Finance Manager referred to the work undertaken by the Schools Accounting Team with schools which had a surplus balance to scrutinise school spending plans and provide guidance.  The Schools Finance Manager advised that the spending plans were also reviewed by the Portfolio Management Team.

Mr David Hytch proposed that the Committee urged the Authority, notwithstanding the Estyn recommendation R4 and recognising that schools are not entitled to set a deficit budget, to continue to support schools in financial difficulty with a view to resolving deficits without detriment to pupils’ learning.  The proposal was seconded by Councillor Andy Dunbobbin.

In response to a concern raised by Councillor Gladys Healey, the Schools Finance Manager explained that pupil numbers were a key part of the schools funding formula.

Councillor David Williams asked if the number of pupils in Flintshire’s schools could be included within the table showing the final school balances.  The Schools Finance Manager agreed to provide this information to the Committee and include in future reports.

The Chair commented on the issue of inflationary increases in teachers’ pay and pensions and proposed that a letter be sent to Kirsty Williams, Assembly Member and Cabinet Secretary for Education, to outline the Committee’s concerns around school balances, which were replicated across Wales, and the lack of clarity around funding for teachers’ pay awards and increasing pension contributions.

Councillor Ian Roberts supported the proposal and suggested that Governing Bodies of schools in Flintshire might also wish to send a letter to the Minister, Assembly Members, and MPs, to outline their concerns and difficulties.

Councillor David Williams suggested that the issue of deficit budgets in some schools also be included in the letter to the Minister.

RESOLVED:

(a)       That the school reserves balances as at the 31 March 2019 be noted;

(b)       That the Committee urges the Authority, notwithstanding the Estyn recommendation R4 and recognising that schools are not entitled to set a deficit budget, to continue to support schools in financial difficulty with a view to resolving deficits without detriment to pupils’ learning; and

(c)        That a letter be written, on behalf of the Committee, to the Welsh Government Minister for Education outlining the Committee’s concerns around school balances, which were clearly replicated across Wales, and seeking clarity around funding for the teacher’s pay awards and increasing pension contributions.